US STOCKS-Wall Street rallies on first day of October, boosted by economic cheer

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(For a Businesshala live blog on the US, UK and European stock markets, click live/ or type live/ in the news window.) (Update to close market)

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Oct 1 (Businesshala) – Wall Street shares edged higher on Friday, fueled by developments in Washington on positive economic data, progress in the fight against COVID, and possible passage of the infrastructure bill, in a buying mood for the fourth quarter. Started. .

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All three major US stock indexes oscillated earlier in the session, but began to trend higher by late afternoon, led by an economically sensitive cyclical.

The rally gained momentum after the White House announced that US President Joe Biden was becoming more involved in the debate on the infrastructure spending bill on Capitol Hill.

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Still, all three indices ended below last Friday’s close, with the S&P 500 and Nasdaq Composite reporting their biggest weekly percentage declines since February.

“There was a massive recovery today. “The market was not settled today on new taxes or tapering,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

“There hasn’t been any major news from Washington in a turnaround for the past few weeks, so markets were forced to focus on positive economic data and a new COVID drug.”

Merck & Co. Inc. revealed that a recent study found its experimental oral drug for COVID-19 reduced the risk of death and hospitalization by nearly 50%, prompting a jump in its shares and an economic reopening. sentiment was encouraged.

While Biden signed a stop-gap bill into law to keep the government running until December 3rd, lawmakers only managed to scuttle down the road.

This lack of resolution prompted rating agency Fitch to warn that the ‘AAA’ credit rating of the United States could be at risk.

“Markets do not assume that debt will be reduced or that the debt limit will not be dealt with, but this still adds to the uncertainty which is always a problem for markets,” Carter said.

A host of economic data released on Friday showed increased consumer spending, accelerating factory activity and increased inflation could help the US Federal Reserve shorten its timeline for tightening its monetary policy. Is.

Philadelphia Fed Chairman Patrick Harker reiterated his view expressed in a speech on Wednesday that he believes the central bank should start reducing its asset purchases “soon,” but reiterated that they should be able to reduce their asset purchases next year. Key interest rates were not expected to rise until the end of the year or until early 2023. .

Informally, the Dow Jones Industrial Average rose 488.73 points, or 1.44%, to 34,332.65, the S&P 500 rose 49.88 points, or 1.16%, to 4,357.42 and the Nasdaq Composite rose 108.76 points, or 0.75%, to 14,557.34.

All 11 key sectors in the S&P 500 ended higher with healthcare stocks at the back of the pack.

Sector gains were dented as shares of COVID vaccine maker Moderna Inc fell in the wake of Merck news.

Economic optimism prompted value stocks to outperform growth, and transport and smallcaps to outperform the broader market. (Reporting by Stephen Culp; Editing by Richard Chang)

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